Two Cellnex directors, the former president Bertrand Kan and Peter Shore, have submitted their resignations amid pressure from activist investor Chris Hohn, who is demanding changes in the telecommunications group, and after clashing with the other members in the process of seeking a new CEO.
In a note sent to the CNMV, both Kan and Shore report that their departure will take place with immediate effect and allude to “irreconcilable differences with the board in relation to the management, direction and succession process of the company”. of “pleasure and privilege” to have participated in the “acquisitions, financing, organization and strategic turn” that have made Cellnex a European leader.
Kan and Shore are, along with Alexandra Reich, the three directors whose resignation is being demanded by the TCI activist fund, led by Hohn, in order to correct “poor corporate governance” and promote the appointment of a new CEO to replace TobÃas MartÃnez , who will step down in June.
Hohn understands that the search for a replacement for MartÃnez has been “neglected” and has targeted the three Cellnex directors, whom he wants to replace with his own candidate, Jonathan Amouyal, and two other members. Kan and Shore had to date the status of independent directors.
Hohn’s offensive worked almost from the start, as it forced the departure of Kan as non-executive chairman of the company, although not his final departure, since he continued as an independent director. Kan has been replaced as president by Anne Bouverot, a director who has been an independent director of Cellnex since May 2018 and is part of its audit and risk management committee.
Kan had so far opposed all the proposed candidates to take over from MartÃnez, which had generated tension within the council itself, which has been aligning itself with Hohn’s thesis of finding a CEO as soon as possible.
Hohn has raised his stake in the company from 7% to 9% and is already the company’s largest shareholder, which is in the middle of a strategic turn. Cellnex’s objective is now organic growth, as opposed to the acquisition policy of recent years. Bouverot adjusts to the new technical profile due to his experience in other telecommunications groups such as Orange.
By taking office, Bouverot already showed his willingness to comply with Hohn’s demands. “The company is at the beginning of a new chapter, focused on organic growth and the strengthening of its balance sheet. The board fully supports this strategy and agrees that finding the right successor to TobÃas MartÃnez is a key priority,†he stated.
Last week, Jonathan Amouyal, a partner at TCI, demanded in statements to Bloomberg that Kan’s departure from the board of directors, after considering that his replacement as president was not enough. He asked him to “resign immediately” because “it is highly unusual for a former president to remain on counsel once they have been asked to leave.”
To appoint a new CEO, the company needs a reinforced majority of eight of the eleven members of the board of directors. The departures of Kan and Shore will facilitate their replacement by new members, which may be ratified at the next shareholders’ meeting.
